Yvette Cooper, Labour’s Chief Secretary to the Treasury, has re-iterated in a live webchat the Government’s commitment to do whatever is necessary to protect the stability of the British economy and help people through these difficult economic times.

Yvette spent over an hour answering questions on a variety of topics including support for business and homeowners and the government’s response to the global economic downturn. She explained why the government has taken the decisions it has to step in and support our banking system and the measures to protect people’s savings.

Over the past few weeks Gordon Brown and Alistair Darling have taken decisive action to support the safety of the British banking system.  A plan which has now been followed throughout the world – with similar action across Europe and in the US.  

However the credit crunch is still being felt by families, businesses and homeowners.  This is why the Government  is  working hard to  help  those who are experiencing financial difficulties.  

The Government have introduced a range of measures to help by supporting businesses with their cash flow, assisting homeowners with their mortgage repayments and shifting Government spending priorities  in order to support our economy  during the tougher times .

Following the webchat Yvette Cooper said – “I was delighted with the number of people who took time out of their day to come and ask me a question.  I know that people are concerned about  what is happening - both abroad and here in the UK. The Government is taking some bold decisions to support  households, businesses and our economy  - Labour won't let you down when the going gets tough.”

Full webchat transcript -

Steve Carlington, says:
My bank has recently been unwilling to give me the credit I have always received to run my business. The government needs to do something to change this or else I will have no breathing room and things will become really tight and my business will suffer.

Yvette Cooper, says:
Hello Steve. I'm sorry you are having such difficulties with your bank. I don't know your particular circumstances, but we are worried about small businesses getting hit by the global credit crunch. Mistakes in the international banking system and the fact that banks are still restricting credit are now having an effect on ordinary businesses not just in this country but all over the world. We have set conditions for those banks that are getting help from the government's new recapitalisation scheme, and they have agreed to increase availability of lending to small businesses as a result. Today Alistair Darling and Peter Mandelson are also meeting with senior executives of other banks to urge all of them to do more to support businesses at a difficult time. i think its important that if government is stepping in to support the banks, then banks should do their bit to support the rest of the economy too. We are also looking at other ways to support businesses who are having difficulty getting credit to help them through the tougher times.

Christopher Bloore, says:
Yvette, Many of my friends and family understand that the economic crisis is a world wide problem and that we are not alone in suffering hard times. However the thought of people’s houses being repossessed is unthinkable to many. What is the government going to do to ensure that the events of the 1980’s are not repeated and we can keep people in their own homes. Yours sincerely, Christopher Bloore

Yvette Cooper, says:
Iagree that we should do everything we can to help people stay in their homes if they've been hit by harder times through no fault of their own. Repossessions should be a last resort not a first resort. And whilst many lenders are responsible, I’ve been really worried by some of the cases I’ve heard about. That's why this week Gordon Brown announced new rules for the courts which make clear that before lenders pursue repossessions they will need to work with borrowers to try to find alternatives such as extending the term of the mortgage, arranging repayment holidays or even mortgage rescue schemes where the bank or a housing association buys back a proportion of the house. We've also increased the support for mortgage interest payments for people who lose their jobs as well.

Susan temple, says:
My partner may not have a job after tomorrow and lots of other companies in the north east are also paying people off. What are you doing to create new jobs in this region and until then what help is available for families to help pay their mortgage in these difficult times. Thanks Sue

Yvette Cooper, says:
Every region in the country -- and in fact every country in the world -- is being affected now by the slowdown. But that makes it even more important for government to back every region through the tougher times. In the early eighties and the early nineties, when we faced big economic problems, the Conservative government completely turned their backs on the regions. Right across the north we saw big job losses and nothing from government to help turn things round not just during the recession but for many years after as well. That's why I agree with you sue that we need to be supporting jobs in every region.  We set up the regional development agencies to support growth, investment and jobs in every area, and we've asked One North East to look particularly at what more needs to be done in your region Sue to help support jobs and businesses. If you check out their website www.onenortheast.co.uk or the Treasury website you should be able to see their initial analysis they did earlier this summer looking at the problems ahead. They are now working with us and the other regional development agencies on what more needs to be done.

Christopher Myall, says:
How much of the efforts to help the economy going to be based upon national efforts and how much will be internationally focused?

Yvette Cooper, says:
We have to do both. The international links between banks and the global nature of the financial crisis mean we can't tackle this alone. It has been extremely helpful that other countries are now implementing similar programmes to ours to recapitalise their banks.  And Gordon Brown is also keen to promote further stronger international action.  But this has to be alongside more immediate help for people here at home -- for example increasing the winter fuel allowance to help pensioners with their gas and electric bills this winter.

Alan Whitehead, says:
Yvette, my question is, what are the Government doing to protect monies from other outside bodies, paid into banks such as pensions from the State and private pensions.  On reaching retirement, the advice received was have your pension paid monthly into your bank, for security reasons. Now with some financial institutions finding themselves in difficulty, pensioners who have monies paid in to banks are beginning to wonder if their bank is safe. Allan

Yvette Cooper, says:
I think people are understandably worried about their savings and investments as a result of all the headlines we've seen about banks and global financial crises. That's why Gordon Brown and Alistair Darling said we would do whatever it takes to keep the banking system safe in Britain. It's why we took over Northern Rock, stepped in over Bradford and Bingley, and why now we have set up this major recapitalisation scheme to invest and take shares in banks so that people can stay confident in the system. Individual accounts are also protected by the compensation scheme which covers £50,000 of savings, and in practice we've done much more. For example in the case of Northern Rock we guaranteed all the deposits, in the case of Bradford and Bingley we transferred all the deposits to Abbey to keep them safe.

M Shafique Ahmad, says:
If a company due to her own stupidity had gone bankrupt why banks are given exceptional treatment and not allowed to die. Let other to open new bank? I do not understand also why each time anything goes wrong global words is used again and again and again?

Yvette Cooper, says:
We all depend on banks -- for our savings, overdrafts, mortgages, and just managing our money from month to month. Businesses too depend on safe and secure banking. If a bank goes under it can have catastrophic consequences -- for the ordinary savers who may lose their dreams and their nest eggs, for the businesses who may go bust, and for confidence in the rest of the banking system too as people fear the knock on effects from bank to bank. That's why i think it was right to step in to support the banks. but its also why its right to demand conditions as part of that help -- so that banks do their bit to support the rest of the economy too.

Duncan Mckay, says:
The housing market is paralysed as 1st time buyers cannot get mortgages (affecting countless sales further up the chain) so why doesn’t the government simply set up a company and lend mortgages to credit worthy first time buyers, and sell the debt to the banks later on?

Yvette Cooper, says:
I agree with you Duncan that the credit crunch and the squeeze on lending to first time buyers is really affecting the entire housing market. We have placed conditions on the banks that are getting government help so they increase the availability of mortgage lending and over time the whole banking support scheme should help get mortgage markets moving again.  Alistair Darling has also asked Sir James Crosby to look at other ways of getting mortgage markets moving and he is due to report shortly.  In addition we have been increasing interest free equity loans and other shared ownership schemes to support first time buyers as well.  Anyone who is struggling to find a mortgage right now should check out their local council or housing association to see what extra help they may be able to get.

Yvette Cooper, says:
Sorry I haven't been able to reply to more questions -- my typing is too slow! I know there is a lot of concern about what is happening in the economy here and across the world and the government is determined to do everything it can to help families and businesses through the tougher times.